Is the gig economy tide turning?


Posted in News

Do recent events show that the payroll procedures of gig businesses will be forced to conform?

The status of the gig economy worker remains a key battleground of employment legislation. Only last week, the Central London Employment Tribunal ruled that three drivers for a London courier firm were employees, not independent contractors, and were therefore entitled to employment rights such as the national minimum wage and holiday pay.

Key to the decision were the technology and vehicles used by the workers. The workers hired branded vehicles through an associated organisation of the courier, and jobs were allocated by an online system (accessed via mobile devices). The combination appears to have led to the decision that the workers were performing driving services, and were therefore employees.

If something feels vague and unsatisfactory about that decision it just goes to show what a mire the gig economy is in at the moment. Hot on the heels of Uber’s failure to achieve a licence renewal in London, this decision feels like another attempt to nudge the gig economy into a format that fits the current world of work.

The disruptors, it seems, are increasingly being made to toe the line – which suddenly doesn’t sound very disruptive at all. But forcing the payrolls of gig businesses to conform to a standard model may be a little short-sighted.

The growing gig

1.3 million people in the UK now work in the gig economy, making up a significant portion of the total of self-employed in the UK which, Bloomberg notes, last year hit 15% – higher than the US or Germany. London’s gig economy has grown by 72% since 2010. And since gig workers are more likely to be young and racially diverse, restricting the gig market could have a detrimental effect on a group of people who, you might think, should be getting more support to work, not less.

The dependent contractor

It feels as though what’s needed is not an attempt to shoehorn 1.3 million people into payroll boxes that don’t quite fit; what we need is a new definition of work.

Ironically, we already have one. July’s Taylor Report recommended the introduction of a third ‘tier’ of employment. Taylor’s “dependent contractor” status aimed to capture “those more casual employment relationships that are on the increase today – an individual who is not an employee, but neither are they genuinely self-employed.”

Yet the report has been subject to considerable scorn, putting in doubt the concept of the dependent contractor almost before the ink was dry on the report. TUC general secretary Frances O’Grady said: “It’s no secret that we wanted this review to be bolder. This is not the game-changer needed to end insecurity at work.”

Jason Moyer-Lee, general secretary of the IWGB union, was less diplomatic when he told The Guardian the proposals were “full of vacuous fluff and light on substantive proposals”, labelling some “wishy-washy”.

Yet this is, at the very least, a pragmatic start, the beginnings of a possible workable solution that could let workers, confused payroll processors and businesses all get past the question of status, and remove the need for gig companies to conform. So we can at last end the conversation about what gig economy workers are, and instead focus on what they do.

Want help establishing the payroll for your gig economy workers? Talk to us.